29 October 2004
A Scottish health board is facing a funding crisis after the disclosure in a report by auditor general Bob Black that it is heading for a £100m deficit by 2007/08.
Black has told Argyll and Clyde Health Board that its projected deficit raises serious concerns about its ability to sustain services. The crisis is highlighted in a report prepared under section 22 of the Public Finance and Accountability (Scotland) Act 2000. The legislation allows matters of concern to be brought to the attention of the Scottish Parliament's audit committee.
In the report, Black said the board's net resource outturn had exceeded its Revenue Resource Limit (RRL), even though this is not permitted. In 2003/04, it recorded a net resource outturn of £506.7m against an RRL of £471.3m, a 7.5% gap.
Black said he was submitting the report because of the failure to meet the target and, more importantly, because of his concern that the board was not forecasting an in-year financial balance until 2007/08, with a planned cumulative excess of more than £70m at that time.
He added: 'Further revision of financial plans by board management has now projected that this deficit will approach £100m by 2007/08. This financial position raises serous concerns about the ability of Argyll and Clyde Health Board to sustain services and retrieve the deficit.'
The recently appointed Scottish health minister, Andy Kerr, said there would be no 'blank cheque' for the board. He voiced his 'extreme unhappiness' at the escalating financial problems and claimed it stemmed from mismanagement.
In a further report this week, Black raised concerns about the Lanarkshire Health Board area, which has also exceeded its RRL.
PFoct2004
